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Neighborhood groups scramble to get funds before city does

Minneapolis neighborhood groups scrambled last month to grab some of the millions in funds that were allocated to them over the past decade but were frozen by the City Council Dec. 14.

One Southwest neighborhood group is prepared to hire an attorney, should the city attempt to take those funds back. A spokesman in the Mayor’s office said the city has no plans to recapture the money.

At issue is about $17 million in unused funds that were allocated to neighborhoods as part of the city’s Neighborhood Revitalization Program. That money was supposed to be for neighborhoods to carry out “action plans” to engage the community, improve housing stock and set up programs to build a better city.

But the City Council froze those funds in order to get budget relief for the next few years. The city in 2011 raised taxes by 4.7 percent.

Neighborhood groups found out about the proposal to freeze the funds three days before the Council voted and buried the city with paperwork for contracting out what money was left for them.

Bob Cooper, who handles NRP accounting for the city, said he wouldn’t know how much money neighborhood groups contracted from the $17 million until mid-January due to the overload in paperwork. Some of the money is untouchable because several of the 80 neighborhood groups in Minneapolis have not yet created action plans for the money. “There was a rush of contracting activity,” Cooper said. “The rule essentially was contracts that began before Council action, essentially began the contracting process, were allowed to go forward, but no new contracts would be started after the council acts were complete.”

The Whittier Alliance was one such group. The group contracted out the $1.2 million remaining it had been allocated but hadn’t put into contract. That money will go into funds for improving homes, rental properties and businesses — all initiatives that had been in the plans for months or years.

On top of that, the Whittier Alliance board in December voted to “keep open avenues for exploring legal options to determine if action is warranted,” said Executive Director Marian Biehn.

“[Neighborhood funding allocations] are things that you have to go on as being in place,” she said. “It was a plan that was approved by the policy board, it was a plan that was approved by the City Council, and you don’t expect to have them turn around and take it away.”

Biehn said Whittier does not have an attorney on retainer, but “let me tell you, we’re making sure we have a few names on hand,” she added.

Whittier has used NRP funds over the past 20 years to improve public safety, invest in the housing stock and improve home ownership, help create Eat Street on Nicollet Avenue and help build Whittier School.

Whittier is not the only neighborhood to go after funds it had been allocated. Based on several different factors including size, income levels, housing, diversity and others, the city set allocation amounts for each neighborhood.

While Whittier was able to contract its remaining $1.2 million from a total allocation of $2.5 million, the Lyndale Neighborhood Association contracted out the roughly $200,000 remaining of its $840,000 allocation.

“We’ve had a lot of contracts that have been in the process since August,” said Mark Hinds, the neighborhood’s executive director.

Hinds said the city backstabbed the neighborhoods. He is a member of the Minneapolis Neighborhood and Community Engagement Commission that went to every neighborhood last summer to get input on how neighborhoods should be funded in the future.

Hinds said the city never hinted to him that the remaining allocated funds were in jeopardy, so none of the meetings with other neighborhoods touched on what would happen if those funds were lost.

“This was a horrible idea that came at the end of the whole process,” he said. “It’s completely contrary to what existing city policy had been for years, it was completely contrary to the principals of community engagement that the council has adopted.”

Hinds said another issue with the NRP freeze is that it could worry some of the private donors who help Lyndale and other groups continue to fund programs.

“I’m very concerned that some of my funders are going to look at what the Council is doing and say, ‘well, we can’t fund Lyndale because all this stuff is going to fall apart, because of what the city is doing,’” Hinds said.

He did say, however, that Lyndale would be “in good shape” for at least the next couple of years.

The city has not completely cut off funding to neighborhoods. Using the frozen NRP money, the city will dole out about $5.3 million annually between the 80 groups over the next couple years, Cooper said. But no funding plan is in place for when the frozen NRP money dries up, likely in 2013.